Competition and Justice in Adam Smith

Abstract

AbstractThis article analyzes the relationship between competition and justice in Adam Smith in order to determine to what extent competition can promote and undermine justice. I examine how competition features in two basic motivations for human action, “the propensity to truck barter and exchange,” and “the desire of bettering our condition.” Both can be traced back to the desire for recognition, but they operate in very different ways. The former manifests itself in social cooperation, chiefly commercial exchange and the division of labor, and while it can take a competitive form, competitive success produces benefits for everyone. In contrast, the latter may manifest itself in win‐lose social competition. Commercial society harnesses both motivations, and both have negative as well as positive effects. However, while Smith explicitly addresses the negative effects of excessive specialization in the division of labor, it is less clear how he thinks the negative effects of social competition can be addressed. I argue that competition can undermine justice when (i) it pits people against each other and (ii) leads to psychological corruption. I conclude with some reflections on what a focus on competition adds to our understanding of Smith's work.